momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.It brings together, managers from the agricultural world and important people from external perspectives, such as health, development, strategy and defense. Its objective is to promote regulationof agricultural markets by creating new evaluation tools, such as economic models and indicators,and by drawing up proposals for an agricultural and international food policy.

Once again, food security stocks intrude on top international agenda…

October 1st, 2012

During a meeting at the Elysée Palace on September 17, French President François Hollande and José Graziano Da Silva, Director-General of the UN Food and Agriculture Organization (FAO), again emphasized the “need to strengthen international cooperation and the regulation of agricultural commodity markets” in a global context “marked by high price volatility.”

During the meeting, José Graziano Da Silva indicated his “full” support to France’s idea to create “strategic food stocks that would be used as emergency relief by poor countries in case of crisis” to fight the price volatility of agricultural commodities1.

Since early September, the French President has been increasing interventions to support the recovery of agriculture, and strongly advocates the “fight against volatility with the creation of emergency food reserves”, as stated at the International Livestock Trade Show held in Rennes on September 11.

Although only a decade ago the champions of the “zero stock” neoliberal doctrine believed in a boundless adjustable output, today things have changed. The volatility of agricultural prices is bound to escalate, and such strategy would now only result in fanning the flames of food insecurity and market instability. Consequently, and on behalf of the “Zero Hunger Challenge” launched at the Rio+20 Summit, the idea of creating national stocks for basic foods is again coating the language of leaders.

Yet, beyond the headlines and pleas for the creation of food stocks, the implementation of such reserve policy will not be an easy task. While the concept of strategic food stocks might be on everyone’s lips, François Hollande and José Graziano Da Silva showed that some semantic fuzziness is still attached to the concept. Admittedly, the two leaders are advocating the creation of “cushion stocks, together with other safety net mechanisms, in the event of any threat to national food security,” but are also stressing that “such stocks should not be designed for any intended market intervention to set a ceiling on prices.”

Which strategy then for tomorrow’s food security? Emergency reserves to support the most vulnerable consumers in times of crisis, or regulation stocks to stabilize agricultural prices? Let’s wait for the ministerial meeting of the G20 Rapid Response Forum scheduled in Rome on October 16, as a side event to the World Food Day Ceremony during which the 20 agriculture ministers are expected to specify their positions on a new stock policy…

It must be said however, that it is now a matter of even greater urgency than before to find the just balance between emergency stocks and regulation stocks based on effective economic and budget regulation mechanisms. As advocated by momagri, three conditions must therefore be met to maximize the success of such stock policy and avoid the recurrence of past errors:

- The emergence of a new global governance system,
- Reference thresholds to initiate stock measures based on the creation of a price tunnel,
- Regulation measure on futures markets to fight speculation on reserves.